The Hale Podcast Episode 16 - Winston Ma on China Tech June 2021

Welcome to the Hale Report. This podcast is the third in our 3-part series on "Technology, Innovation & Competition" or the new New Economy. My guest is Winston Ma and our topic is how China's technology sector is shaping the future of AI, blockchain, and cyberspace. 

Mr Ma is an investor, author, and adjunct professor at NYU's School of Law. For ten years he was Managing Director and Head of the North America Office for China Investment Corporation, China’s sovereign wealth fund. He is one of a small number of native Chinese who have worked as investment professionals and practicing capital markets attorneys in both the United States and China. 

He is the author of several books, including Digital War: How China's Tech Power Shapes the Future of AI, Blockchain and Cyberspace (2021) and The Hunt for Unicorns: How Sovereign Funds are Reshaping Investment in the Digital Economy (2020). The competitive landscape he describes is changing so quickly it demands a new book every year-and maybe every six months. 

At a time when China has become isolated, I found Ma's comments about the effects of the pandemic on the development of China's tech sector and its emerging market customers especially intriguing. During our discussion he provides valuable updates on how the sector has been altered both by COVID-19 and an enduring shift in US policy towards China. 

Other than El Salvador, China's leader Xi Jinping is the only head of state who has publicly backed blockchain development. Some of the tech drama between the US and China is playing out in cryptocurrency markets, which have been impacted by the recent crackdown on bitcoin mining pools. Ma has been a highly visible commentator on crypto in China in financial news media; I included one link below on this subject. Our June newsletter will cover this topic as well.

Listen to the Podcast with Winston Ma
Here are a few excerpts from our hour-long discussion, which I hope you will find useful and will encourage you to enjoy the podcast:

In order to think about Fintech and cryptoeconomics, you definitely have to put those issues in the context of a three-legged stool: technology, finance, and regulation.

Despite the trade war, digital war, the everything war, Chinese companies are coming to the US to IPO at a record pace. So it seems capital flows and business transactions between the two markets are still very strong.

Before the pandemic, China came up with the Belt and Road Initiative to increase more global connectivities in the physical trade context, and then several years after that, China added the digital dimension, the Digital Silk Road, to cover connectivity in cyberspace and cross-border digital service trades. As a result, we have seen lots of China capital-driven digital infrastructure projects in the emerging markets.

I think you will see mixed results for China's Digital Silk Road projects in emerging markets. Some will be slowed down. Some actually are being accelerated because of the rising demand for data and information service because of the pandemic.

I think LinkedIn is a good example of a US company adapting itself to the China market. Another example would be Microsoft. Despite all the data regulations, Microsoft remains in the market and is still expanding its cloud business in China. But when we talk about the consumer tech business, I think absolutely, yes. If US companies have more presence in China, they can actually get lots of new ideas from China, which is a super-competitive market.

So some of the pandemic-related actions, like tracking people's location, tracking people's traveling activities and their payment activities were done with the help of the private platforms (like WeChat). It was very helpful at the worst time of the pandemic but when things got more normalized, and people started to worry whether these private platforms would abuse the amount of data they collect during that process. 
--Was the Ant IPO a victim of the pandemic?

June 4, 2021 / COINTELEGRAPH
Death Knell for Chinese Crypto Miners-Rigs on the move after gov’t crackdown 
Andrew Singer

The latest events in China have pushed crypto miners to reevaluate domestic risk as they may now look toward international expansion. According to Winston Ma:

The Chinese government has pledged to meet energy efficiency targets, which could still limit the expansion of high energy-consuming industries like crypto mining

If you'd like to listen to the first in this podcast series please click here: Episode 14 of the Hale Report. My guest was Sheila Warren of the World Economic Forum on blockchain technology. We discussed the economic implications of crypto and blockchain technology. Episode 15, with Dan Breznitz of the University of Toronto focuses on innovation.